Where Process-Improvement Projects Go Wrong

Where Process-Improvement Projects Go Wrong

Here is a very interesting article from MIT Sloan Management Review on effectiveness on Where Process-Improvement Projects Go Wrong. I have read the results of a survey on cost cutting that more than 90% of the organizations surveyed failed to maintain savings for more than 3 years. This article mentions another interesting result: more than 60% organizations adopting 6 sigma are dissatisfied with the results.

The underlying thesis is that even though process improves under the management attention in improvement projects, it revers back to original unless organizations puts in place concrete practices to make sure changes stick. Normally, the pre-improvement practices exist because of culture / team member tendencies. These are difficult to change and or maintain. The article points out four lessons:

First, the extended involvement of a Six Sigma or other improvement expert is required if teams are to remain motivated, continue learning and maintain gains.

Second, performance appraisals need to be tied to successful implementation of improvement projects. Studies point out that raises, even in small amounts, can motivate team members to embrace new, better work practices.

Third, improvement teams should have no more than six to nine members, and the timeline for launching a project should be no longer than six to eight weeks. The bigger the team, the greater the chance members will have competing interests and the harder it will be for them to agree on goals, especially after the improvement expert has moved on to a new project.

Fourth, executives need to directly participate in improvement projects, not just “support” them. Because it was in his best interests, the director in charge of the improvement projects at the aerospace company created the illusion that everything was great by communicating only about projects that were yielding excellent results. By observing the successes and failures of improvement programs firsthand, rather than relying on someone else’s interpretation, executives can make more accurate assessments as to which ones are worth continuing.

I think the fourth point is probably the most important one. I have seen many a six sigma projects failed because there was no real incentive to change, no pressure from the executive in-charge to drive performance and no clear way to measure performance to start with…